Contract for Deed (Land Contract)

CONTRACT FOR DEED

(NORTH CAROLINA – N.C.G.S. CHAPTER 47H / SELLER FINANCING)

IMPORTANT NORTH CAROLINA NOTICE. This Contract is governed by the North Carolina Contracts for Deed Act, N.C.G.S. Chapter 47H, where it covers residential property (a 1-to-4 family dwelling or a manufactured home occupied by the Purchaser as a principal dwelling, with a purchase price of $5,000 or more). Chapter 47H requires (a) a signed and acknowledged written contract containing the minimum contents in § 47H-2, (b) recordation of the contract (or memorandum) by the Seller, and (c) a mandatory notice-of-default-and-intent-to-forfeit process with at least a 30-day right to cure under §§ 47H-3 and 47H-4 before any forfeiture. A forfeiture that does not comply with Chapter 47H is invalid. This document must be reviewed by North Carolina counsel before use.

TABLE OF CONTENTS

1. Parties and Recitals
2. Definitions
3. Property and Legal Description
4. Purchase Price, Down Payment, and Installment Terms (§ 47H-2)
5. Title; Deed Held and Escrow
6. Possession
7. Taxes, Insurance, Maintenance, and Repairs (§ 47H-2(b)(12))
8. Default and Remedies (Forfeiture and Right to Cure – §§ 47H-3, 47H-4)
9. Prepayment (§ 47H-2(b)(13))
10. Recording (§ 47H-2)
11. Risk of Loss
12. Assignment; Encumbrance by Seller (§ 47H-6); Due-on-Sale
13. Representations, Warranties, and Disclosures (Chapter 47E)
14. General Provisions
15. Execution, Acknowledgment, and Notary
16. Exhibits and Schedules
17. Sources and References

1. PARTIES AND RECITALS

1.1 Parties. This Contract for Deed (the "Contract") is made effective as of [__/__/____] (the "Effective Date") by and between [SELLER LEGAL NAME], of [SELLER ADDRESS] ("Seller"), and [PURCHASER LEGAL NAME], of [PURCHASER ADDRESS] ("Purchaser"). (§ 47H-2(b)(1): full names and addresses of all parties.)

1.2 Recitals.
A. Seller owns fee-simple title to the residential real property described in Section 3 (the "Property").
B. Seller agrees to sell, and Purchaser agrees to buy, the Property on the installment terms herein, with Seller retaining title as security until the purchase price is paid in full (§ 47H-1(1)).
C. Purchaser intends to occupy the Property as Purchaser's principal dwelling.
D. The Parties intend this Contract to comply with N.C.G.S. Chapter 47H.

2. DEFINITIONS

"Contract for Deed" – an agreement under which Seller agrees to sell an interest in property to Purchaser and Purchaser agrees to pay the purchase price in five or more payments (exclusive of any down payment), with Seller retaining title as security. (§ 47H-1(1).)

"Cure the Default" – to perform the obligations described in the notice of default and intent to forfeit required by § 47H-4 that are necessary to reinstate the Contract. (§ 47H-1(2).)

"Down Payment" – a payment made by Purchaser that constitutes part of the purchase price and is made in connection with execution of the Contract. (§ 47H-1(3).)

"Forfeiture" – termination of all of Purchaser's rights, title, and interest in the Property to the extent permitted by Chapter 47H because of a breach of Purchaser's obligations. (§ 47H-1(4).)

"Principal Balance" – the sum of the sales price and any separate charges/fees, less the down payment. (§ 47H-2(b)(7).)

3. PROPERTY AND LEGAL DESCRIPTION

3.1 Property (§ 47H-2(b)(3)). Seller agrees to sell and Purchaser agrees to buy the property located in [COUNTY] County, North Carolina. Physical address: [STREET ADDRESS, CITY, NC ZIP].

3.2 Legal Description. The Property is legally described as:

[________________________________________________________________
________________________________________________________________]

3.3 Manufactured Home (if applicable). If a manufactured home, VIN/serial: [________________________________].

4. PURCHASE PRICE, DOWN PAYMENT, AND INSTALLMENT TERMS (§ 47H-2)

4.1 Sales Price (§ 47H-2(b)(4)). The sales price of the Property is $[____________].

4.2 Separate Charges/Fees (§ 47H-2(b)(5)). Charges or fees for services included separate from the sales price: $[____________] ([describe] or "None").

4.3 Down Payment (§ 47H-2(b)(6)). Purchaser's down payment is $[____________].

4.4 Principal Balance (§ 47H-2(b)(7)). The principal balance owed (sales price + separate charges, less down payment) is $[____________].

4.5 Interest Rate (§ 47H-2(b)(9)). The interest rate on the unpaid balance is [____]% per annum; method of determining the rate: [fixed / describe].

4.6 Installment Schedule (§ 47H-2(b)(8)).

4.7 Application of Payments. Payments apply first to late charges, then accrued interest, then principal, unless otherwise required by law.

4.8 Late Charge. A late charge of $[____] or [____]% applies to payments more than [____] days late, subject to N.C.G.S. Chapter 24 limits.

4.9 Place of Payment. Payments are made to Seller at [ADDRESS] or to the Escrow Agent as designated.

5. TITLE; DEED HELD AND ESCROW

5.1 Retention of Title. Seller retains legal title to the Property as security for Purchaser's obligations until the purchase price and all other sums are paid in full.

5.2 Public-Record Defects (§ 47H-2(b)(10)). Seller conspicuously discloses any pending order of a public agency or other matters of public record adversely affecting the Property of which Seller has actual knowledge: [NONE / describe].

5.3 Deed Held in Escrow. Seller shall deposit with the Escrow Agent ([NAME/ADDRESS]) a duly executed and acknowledged [general/special warranty deed] conveying the Property to Purchaser, to be delivered upon full payment and performance.

5.4 Conveyance on Payoff. Upon full payment, Seller shall deliver and record the deed, conveying marketable title free of liens except Permitted Exceptions and matters created by Purchaser.

6. POSSESSION

Purchaser is entitled to possession of the Property as of [__/__/____] and shall occupy it as Purchaser's principal dwelling. Purchaser holds equitable title subject to this Contract.

7. TAXES, INSURANCE, MAINTENANCE, AND REPAIRS (§ 47H-2(b)(12))

This Contract sets forth the obligation of each Party responsible for the following from the date of the Contract:

7.1 Insurance Amount. Hazard insurance shall be maintained for not less than $[____________], with Seller named as additional insured / loss payee as its interest appears.

7.2 Waste. Purchaser shall commit no waste and shall keep the Property in good repair to the extent Purchaser is the responsible Party above.

8. DEFAULT AND REMEDIES (FORFEITURE AND RIGHT TO CURE – §§ 47H-3, 47H-4)

8.1 No Forfeiture Without Breach (§ 47H-3). This Contract may not be forfeited unless a breach has occurred in one or more of Purchaser's express obligations under the Contract and forfeiture is permitted by Chapter 47H.

8.2 Purchaser's Right to Cure (§ 47H-2(b)(11), § 47H-3). Purchaser has the right to cure a default and reinstate the Contract by performing the obligations described in the statutory notice.

8.3 Notice of Default and Intent to Forfeit (§ 47H-4). Before any forfeiture, Seller shall serve on Purchaser a written Notice of Default and Intent to Forfeit that:
(a) reasonably identifies the Contract and the Property;
(b) specifies the obligations breached and the action required to cure;
(c) states the amount of money, if any, required to cure and an itemization;
(d) states that the Purchaser has at least thirty (30) days from service to cure the default; and
(e) states that, if the default is not timely cured, the Contract will stand forfeited.

Service shall be made by hand delivery or by a method authorized by Rule 4 of the North Carolina Rules of Civil Procedure. (§ 47H-4.)

8.4 Reinstatement on Cure. If Purchaser cures within the statutory period, the Contract is reinstated as though no default had occurred.

8.5 Remedies on Uncured Default. If the default is not cured within the statutory period, Seller may, in compliance with Chapter 47H, (a) declare a forfeiture to the extent permitted by Chapter 47H and recover possession, or (b) pursue any other remedy available under North Carolina law (including, where the parties have used a deed of trust permitted under § 47H-6, foreclosure of that instrument).

8.6 Attorney Fees. Recoverable only to the extent permitted by North Carolina law.

9. PREPAYMENT (§ 47H-2(b)(13))

Purchaser has the right to accelerate or prepay any installment payments without penalty, except that, if the Property is encumbered by a deed of trust permitted under § 47H-6 and the loan secured thereby contains a prepayment penalty, this Contract may specify that Purchaser will compensate Seller for that prepayment penalty: [N/A / describe].

10. RECORDING (§ 47H-2)

10.1 Writing Required and Recordation. This Contract is evidenced by a writing signed and acknowledged by all Parties and containing all agreed terms; Seller has delivered an exact copy to Purchaser at signing (§ 47H-2(a)). The Seller shall cause this Contract (or a memorandum complying with N.C.G.S. § 47-119.1) to be recorded in the office of the Register of Deeds of [COUNTY] County.

10.2 Costs. Recording fees shall be paid by [Seller/Purchaser].

11. RISK OF LOSS

From the date of possession, risk of loss is on Purchaser to the extent Purchaser is the Party responsible for insurance under Section 7. Insurance proceeds shall be applied to restoration or to the principal balance as the Parties' interests appear.

12. ASSIGNMENT; ENCUMBRANCE BY SELLER (§ 47H-6); DUE-ON-SALE

12.1 Assignment by Purchaser. Purchaser shall not assign this Contract without Seller's prior written consent, which [shall/shall not] be unreasonably withheld.

12.2 Seller's Encumbrance (§ 47H-6). Seller may encumber the Property by a deed of trust only as permitted by § 47H-6; Seller shall not encumber the Property in a manner inconsistent with Purchaser's rights under Chapter 47H.

12.3 Due-on-Sale (Garn–St. Germain). If the Property is subject to a prior mortgage or deed of trust with a due-on-sale clause, this Contract may trigger acceleration. The federal Garn–St. Germain Act, 12 U.S.C. § 1701j-3, preempts most state restrictions and contains limited exemptions. Seller discloses underlying financing on Schedule 2.

13. REPRESENTATIONS, WARRANTIES, AND DISCLOSURES (CHAPTER 47E)

13.1 Residential Property Disclosure (§ 47H-2(b)(14a)). Seller shall provide a completed Residential Property and Owners' Association Disclosure Statement complying with N.C.G.S. Chapter 47E, provided Seller does not elect "No Representation" as to any characteristic or condition. (Schedule 4.)

13.2 Lead-Based Paint Disclosure (Pre-1978). If the dwelling was built before 1978, Seller shall provide the federal lead-based paint disclosure and the EPA pamphlet "Protect Your Family From Lead in Your Home," and afford Purchaser the opportunity to conduct a lead inspection, as required by 42 U.S.C. § 4852d and 24 C.F.R. Part 35 / 40 C.F.R. Part 745. (Schedule 3.)

13.3 Seller's Title. Seller represents Seller holds marketable fee-simple title subject only to Permitted Exceptions and matters disclosed under § 47H-2(b)(10).

13.4 Consumer-Protection Guidance.

• This Contract is governed by N.C.G.S. Chapter 47H, which protects residential purchasers.
• Purchaser does not receive legal title until the purchase price is paid in full.
• The Seller must record the Contract and must give a written Notice of Default and Intent to Forfeit with at least 30 days to cure before any forfeiture.
• Keep proof of every payment; verify taxes and insurance are current.
• Confirm whether any prior deed of trust encumbers the Property.
• Both Parties are strongly encouraged to obtain independent legal counsel and title insurance.

14. GENERAL PROVISIONS

14.1 Governing Law. This Contract is governed by North Carolina law, including N.C.G.S. Chapter 47H.

14.2 Forum. The state courts of the county where the Property is located have jurisdiction.

14.3 Time of Essence. Time is of the essence.

14.4 Notices. Except where § 47H-4 specifies the method, notices must be in writing and delivered personally, by certified mail (return receipt requested), or by nationally recognized overnight courier to the addresses above.

14.5 Entire Agreement; Amendments. This Contract is the entire agreement and may be amended only in a signed writing; no amendment may waive a Purchaser protection mandated by Chapter 47H.

14.6 Severability. Invalid provisions shall be reformed to the minimum extent necessary; the remainder remains in effect.

14.7 Successors. This Contract binds and benefits the Parties and their permitted successors and assigns.

14.8 Counterparts; Electronic Signatures. This Contract may be executed in counterparts and by electronic signature, provided it remains capable of acknowledgment and recordation.

15. EXECUTION, ACKNOWLEDGMENT, AND NOTARY

IN WITNESS WHEREOF, the Parties have executed this Contract, each acknowledging it as required by § 47H-2(a).

Date signed by Seller (§ 47H-2(b)(2)): [__/__/____]
Date signed by Purchaser (§ 47H-2(b)(2)): [__/__/____]

SELLER

____________________________________
[SELLER LEGAL NAME]

PURCHASER

____________________________________
[PURCHASER LEGAL NAME]

NOTARY ACKNOWLEDGMENT

State of North Carolina )
County of __________ ) ss.

I certify that the following person(s) personally appeared before me this day, acknowledging to me that he/she/they signed the foregoing document: [NAME(S)].

Date: [__/__/____]

____________________________________
Notary Public
My Commission Expires: [__/__/____]

16. EXHIBITS AND SCHEDULES

Schedule 1 – Permitted Exceptions / Title Matters
Schedule 2 – Underlying Financing Disclosure (§ 47H-6)
Schedule 3 – Lead-Based Paint Disclosure (pre-1978 dwellings)
Schedule 4 – Residential Property Disclosure Statement (Chapter 47E)
Schedule 5 – Memorandum of Contract for Deed (N.C.G.S. § 47-119.1) for recording

17. SOURCES AND REFERENCES

• N.C. Gen. Stat. Chapter 47H (Contracts for Deed): https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/ByChapter/Chapter_47H.html
• N.C. Gen. Stat. § 47H-1 (definitions); § 47H-2 (minimum contents; recordation); § 47H-3 (forfeiture; right to cure); § 47H-4 (notice of default and intent to forfeit); § 47H-6 (encumbrance by seller)
• N.C. Gen. Stat. Chapter 47E (Residential Property Disclosure Act)
• N.C. Gen. Stat. § 47-119.1 (memorandum of contract to purchase real estate)
• Garn–St. Germain Depository Institutions Act, 12 U.S.C. § 1701j-3
• Residential Lead-Based Paint Hazard Reduction Act, 42 U.S.C. § 4852d

END OF DOCUMENT